Bid spotlight comes back to Weir

The spotlight is back on Scotland’s Weir Group in the contest for
Ludowici
, after the Takeovers Panel stuck to a decision to allow rival suitor FLSmidth to continue with its higher offer of $11 a share.

The panel declined to conduct proceedings on appeals to its decision by Weir and Denmark’s FLSmidth, triggering a sharp rise in Brisbane-based Ludowici’s shares as the bidding war recommenced.

Weir may now opt for a judicial review – like that sought in Cemex’s takeover of Rinker Group – raise its $10 a share offer, or walk away.

“The panel concluded there was no reasonable prospect that it would make a different decision to the decision of the initial panel," it said.

The takeover contest for the minerals equipment processing company was brought to a halt a week ago while the panel decided whether to reconsider the matter.

After taking into account Australia’s “truth in takeovers" policy, the panel last month gave FLSmidth the green light to lift its offer from $7.20 per share, provided it compensated investors that may have traded shares before the bid was raised. That came after FLSmidth’s chief Jorgen Huno Rasmussen told Reuters the offer would not be raised, prompting Weir to apply to the panel for the company to be held to the statement.

FLSmidth’s $11 a share offer values Ludowici at $325 million. Investors are betting that Weir will raise its offer, as Ludowici’s shares finished 1.6 per cent higher at $11.30 at the close of trading on Friday.

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It said its orders did not “unfairly prejudice" any party because compensation would be paid to affected investors.

The panel said the statements by FLSmidth were not clarified quickly enough and that Weir had pursued an application in a “timely enough" manner. But it also took a swipe at Weir, saying moves to set a time limit on its $10 per share bid may have been an “attempt to influence" the panel.

The document noted it was “ambiguous enough" as to whether the Reuters report constituted a final statement under the “truth in takeovers" rule. Those rules bind parties to statements made during takeovers.

In February, the panel made a declaration on FLSmidth’s actions saying affected Ludowici shareholders must prove they traded on the Reuters comments.